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Demand for gold has gone through the roof recently. While the precious metal has always been popular, climbing prices have attracted droves of new investors. Unfortunately, this has also led to an increase in the number of fake gold coins on the market.
Unfortunately, a single mistake when purchasing such an item can prove extremely costly. For instance, buying American Gold Eagles can set a person back well over $1,000. If you accidentally buy a counterfeit version, though, the item is literally worthless.
At Silver Gold Bull, we want precious metal investors and collectors to always know what they’re paying for. That’s why we’ve created this guide to avoiding fake gold coins. An informed investment is a smart investment, so always keep the following tips in mind.
1. Know What You’re Buying
Would you purchase a car or house without doing your homework? If not, then you shouldn’t do so when buying gold coins. While most people invest far more on the former two items, the same rules apply when buying precious metals. Know what you’re buying before buying it.
This means you should know the basics of any gold coin you’re looking at. If you’re thinking of buying a $50 American Gold Eagle, for instance, you should know that the diameter is 32.70 mm. Knowing that the thickness is 2.87 mm is also important.
Even if you’re not an expert at spotting fake gold coins, this basic information can help you make better decisions. For example, envision a person trying to sell you a $50 American Gold Eagle with a diameter of 30.7 mm. Since you know this is 2 mm off, you know the coin isn’t authentic.
2. Don’t Buy Coins From Pawn Shops
Forgers who make fake gold coins can even fool professional dealers occasionally. It’s a simple truth that not even the experts are infallible. This explains how a man recently discovered that his vintage coin — identified as fake by several dealers — was real and worth millions.
These are professional coin dealers making mistakes, so how would pawnbrokers do any better? While many of these entrepreneurs take their jobs seriously, the fact remains that authenticating coins isn’t always a simple process.
If you decide to shop for precious metals at a pawn shop, don’t be surprised if you leave with a fake gold coin.
3. Know How to Spot Red Flags for Fake Gold Coins
Back in 2016, federal authorities noticed a major increase in counterfeit silver and gold coins. Of course, gold prices have soared since that point, so the problem has become even more significant. In some cases, sellers may not even realize they’re putting a fake coin up for sale.
Of course, there are plenty of unscrupulous folks out there as well. If you encounter one of these individuals, there are likely to be several red flags. When you notice any of the following issues, it’s probably best to walk away. More often than not, you’re dealing with a fake gold coin.
- Seller offers a price that’s too good to be true.
- You’re being rushed to complete the sale by the seller.
- Seller attempts to switch the coin you initially looked at.
- Most con artists won’t meet somewhere with video surveillance. Ask them to meet at a Police station. This will scare off most criminals.
Ask yourself if a reputable seller would ever behave in these ways. The answer is no. Don’t let what seems like a good deal cloud your judgment. Remain vigilant at all times regardless of the situation. This is the only way to avoid buying fake gold coins.
4. Use a Professional Testing Machine
There are plenty of tests you can perform to identify counterfeit gold coins. The next section discusses a variety of these methods. Of course, none of them come close to the accuracy offered by professional testing machines.
There are a variety of options out there, and each will have its own benefits. The big drawback, however, is the price. But if you’re making a habit of purchasing bullion coins around town, this is probably the best way to avoid buying fake gold coins.
5. Have a Few Tests Up Your Sleeve
Unfortunately, professional testing machines can cost thousands of dollars. For most folks, that puts these gadgets out of reach. Luckily, you don’t need complex tools to spot fake gold coins. There are several simple tests you can perform on your own that can be just as effective.
Magnet Test to Spot Fake Gold Coins
If you place a magnet up against a gold coin, there should be no reaction at all. Gold isn’t magnetic. Of course, there are other metals that aren’t magnetic as well. That’s why you should only use this test to identify counterfeits — never as a foolproof authentication method.
Ceramic Test to Spot Fake Gold Coins
Gold and ceramic interact in interesting ways. If you rub a gold coin against an unglazed piece of ceramic tile, you will see a golden streak left behind. If the marking is black, you’ve got a fake gold coin on your hands.
Water Test to Spot Fake Gold Coins
This is another test to eliminate fakes that you shouldn’t use as a sole authentication measure. Still, a glass of water can help you quickly spot a fake gold coin. That’s because gold sinks — fool’s gold does not. If your “gold coin” floats in water, it’s a sure sign it’s counterfeit.
6. Be Weary of Fake Gold Coins on Auction Sites
Have you considered buying gold bullion bars, coins, or any other precious metal on sites like eBay? If so, it’s important to know what you’re getting. While these eCommerce platforms don’t allow counterfeit items, sellers may not even know that they’re offering something fake.
Millions of fake coins get sold on the market every day. Counterfeiters have even begun creating fake authentication slabs to trick buyers. It’s very possible that a seller on eBay purchased a fake gold coin without knowing it. Make sure you don’t become the next victim.
7. Avoid Real Coins at Fake Prices
Not all gold coin scams involve counterfeit items. An investigation in 2020 found that older Americans were losing millions of dollars by purchasing authentic gold coins at inflated prices. Unfortunately, these scams often fly under the radar since they’re not always illegal.
This scam starts out with companies contacting potential buyers offering gold coins. During their sales pitch, the fraudsters claim that the government could confiscate assets held in IRAs and other retirement accounts. They use instances of past gold confiscation to support this theory.
In the end, they offer “collectible” gold coins for prices higher than they’re worth. The moment someone buys an $1,800 coin for $2,300, they immediately lose out on their investment. The saddest part about this is that they could’ve bought the same coin from a reputable dealer at a much lower price.
8. Buy from a Reputable Dealer
There are a variety of ways you can avoid buying fake gold coins. If you want to keep things really simple, though, you just need to buy from reputable dealers. While it may seem tempting to purchase from other sources with seemingly great prices, you’re always taking a chance in doing so.
Of course, we’ve already mentioned how some professional dealers make mistakes. This is a reality you have to accept when buying from coin dealers that purchase from the public. Fortunately, this isn’t a concern you need to have with companies that work with mints.
At Silver Gold Bull, you’ll find a variety of gold coins coming directly from respected mints. We work with the most reputable private mints in the world, and our supplies of gold currencies are backed by their respective governments. Buy from a reputable dealer, and you’ll always be in excellent hands.
9. Check Reviews to Avoid Fake Gold Coins
Working with a dealer whose supply comes directly from the source is ideal. If you come across a coin elsewhere and need to make a quick decision, though, you may not have this luxury. Fortunately, you probably have your phone on you. Take a moment to see if the seller has online reviews.
This strategy can work whether you’re at a local shop or checking out offerings on eBay. Online reviews are currently the best way to learn about any seller. In fact, they’re so helpful that over 80% of people trust these digital testimonials as much as personal recommendations from friends.
Buying from dealers whose supply comes from verified sources is ideal. Checking out a seller’s reputation online, however, is a solid runner up.
10. Consider Buying Certified Coins
One of the best ways to avoid fake gold coins is to purchase authenticated items. Buying certified coins means you’re getting a genuine item. And while counterfeiters have faked these authentications, there are several ways you can verify them before purchase.
If you come across a coin inside an authentication service’s slab, for instance, you can call up that service and verify the registration number. And when you buy these coins from reputable dealers like Silver Gold Bull, you know they’re coming directly from the source.
In addition to avoiding fake gold coins, you’re also making a better investment with certified offerings. That’s because buyers will know your gold is authentic whenever you decide to sell. It’s a win-win for everyone involved.
Visit Silver Gold Bull to Avoid Fake Gold Coins
Even if you’re buying gold by the gram, this precious metal is a major investment. And considering the numismatic value many gold coins carry, you’re investing in more than just bullion. This is why it’s so important to remain vigilant when making purchases.
Counterfeit bullion coins have become a major problem across the globe. In some instances, scammers may fool even professional dealers. By making yourself an informed investor, though, you can minimize your risk and better avoid fake gold coins.
At Silver Gold Bull, we guarantee all the items we sell are authentic. They come from the most reputable refineries and mints around the world. Visit our Gold Bullion Product page today to see all the genuine precious metal coins we offer.
